Strong growth at its European parcels business helped the company to beat first-half profit forecasts, though it warned an ongoing labour dispute could hit its second-half performance.

“More of the same from Royal Mail with good growth in parcels and GLS (General Logistics Systems) while letters are in freefall decline: yet more evidence of the structural problems it faces as it heads into the key Christmas trading period,” said ETX Capital analyst Neil Wilson.

But well-received earning updates lifted shares in private equity firm 3i Group (III.L) and property company British Land (BLND.L) which rose both more than 2 percent.

Data showing that British retail sales recorded their first year-on-year decline since 2013 last month had no impact on the main benchmark indices.

Worries over a slowing British economy has discouraged some investors from taking exposure to domestic stocks, as households battle with fast-rising prices and Brexit talks drag on.

“We don’t have a huge exposure but I think it’s fair to say the UK domestic plays are finding the environment far tougher than for the Europeans on the continent,” said Andrew King, head of European equity strategy at BNP Paribas Investment Partners.

“The UK economy is struggling a bit undoubtedly because of Brexit concerns,” he added.